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Turcoin Revealed as $20M Ponzi Amid False Promises of Turkish National Crypto

Turcoin, hailed once as Turkey’s new alternative digital token and potential national cryptocurrency has been denounced as a Ponzi scheme, writes Bitcoin Exchange Guide.

It appears that the founders have disappeared, apparently accused of fleeing Turkey, absconding with more than 100 million Turkish liras (about USD 20 million) collected from over 10,000 people in in the country.

The company had gained plenty of publicity since its startup including laying on massive parties for celebrity guests and awarding luxury vehicles to early adopters of Turcoin, late in 2017. Since then, it’s been reported that the cars were borrowed rather than owned by the company.

The Ponzi scheme ran for nine months before it was uncovered, duping customers with promises that it was to become Turkey’s national cryptocurrency, despite lacking any acknowledgement of that from government officials at any time.

The company originated out of Hipper, an Istanbul-based company founded by Muhammed Satıroğlu and Sadun Kaya, who are now both finger pointing at each other, neither claiming to be the perpetrator of any wrongdoing.

Satıroğlu, who owns 49% of Hipper, has claimed that he was simply a mediator and that the company holds no funds in its accounts. Kaya, with his 51% holding, has vanished, although the company is promising to return funds once its accounts are frozen; difficult considering Satıroğlu is claiming the company has no extra funds banked and that the funds are in Kaya’s account in Cyprus.

Cryptocurrency users should be aware of Ponzi schemes, many of which insist that customers lock up their funds for what would be regarded as an unreasonable amount of time. Bitconnect, which was recently outed as a Ponzi scheme last year by investors, including Ethereum founder Vitalik Buterin, is a case in point. Ponzi schemes often leverage the popularity of bitcoin and cryptocurrencies to promise impossibly high and regular returns. The Bitconnect example promised 40% return on investment each month, providing investors locked up their capital on its platform, writes BTC manager.


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China Arrests 98, Recovers Record $266M from OneCoin Ponzi

The Zhuzhou County Procuratorate in Hunan Province, China has arrested and prosecuted 98 people associated with the OneCoin cryptocurrency pyramid scheme, and has recovered CNY 1.7 billion (approximately USD 266 million at time of writing) in the process. This is the largest number of people involved in an investigation and the largest amount of economic loss recovered by the agency.

OneCoin is a global pyramid scheme based out of Copenhagen, Denmark. In China it is called Weika Coin. OneCoin generated huge outflows of capital from 20 different Chinese provinces, with 2 million registered accounts in China. Investors in China collectively put over CNY 15 billion into the scheme. Most of this money exited China and went to people in foreign countries at the top of the pyramid scheme, seriously endangering national financial security and stability.

The OneCoin organization claimed that it was a second generation of cryptocurrency after Bitcoin and already had a huge following, and promised tremendous returns for investors. It was impossible to view the inner-workings of OneCoin without buying a non-refundable starter package, the least expensive of which cost EUR 130 and the most expensive a whopping EUR 36,330.

When purchasing OneCoin a user receives tokens that have no value, and they can submit these tokens for “mining” where the tokens eventually become OneCoins. This isn’t true cryptocurrency mining where a user is rewarded for putting their computing power towards maintaining and securing the network. There is no evidence that OneCoin ever had a blockchain to maintain and secure, and the inner-workings of the “mining” process were secretive.

If a user received OneCoin from “mining” – itself no guarantee – these could be traded for EUR on a private exchange on the website up until January 2017 when the exchange shut down without notice. Once the exchange shut down, there was no way to recover any money since it was exchanged nowhere else, unravelling the scam.

OneCoin was a classic pyramid scheme where users would get other people to invest and receive EUR referral rewards for doing so. These rewards were paid from other investments, so OneCoin did not have enough money to cover all of its balances. There were also strict selling limits for OneCoin preventing people from cashing out too much at once. Eventually, withdraw requests exceeded the amount of money OneCoin had in its bank and the pyramid collapsed.

Numerous countries besides China have opened investigations and taken legal action against the founders of OneCoin, as well as the people who helped the OneCoin Ponzi scheme proliferate by getting other people to invest. The OneCoin website has remained offline. Its founder, Ruja Ignatova, is facing criminal charges in multiple countries but has disappeared.


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Nigeria Can Be Empowered By Bitcoin Says Foundation CEO

Lady Victoria Walker, CEO of the United Digital Currency Reserve Foundation, has recently stressed that the understanding and deployment of bitcoin can kickstart the financial growth in Nigeria and Africa as a whole, reports Niger247News

In a recent presentation Lady Walker, who is also a blockchain and cryptocurrency speaker, as well as Principal Consultant at Cryptoria Investment Research, maintains that for Nigerian banks to deal with blockchain technologies, it first needs to understand cryptocurrencies:

“Many banks and regulators are confused and do not fully understand how Bitcoin and blockchain technology work, but I think once the Central Bank of Nigeria and other key figures get to understand the true nature of blockchain technology and what it can bring economically, I believe they may embrace the technology with open arms.”

The UK based fintech entrepreneur feels that new technologies such as blockchain and cryptocurrency are essential factors in empowering African leaders to inject growth and financial inclusivity into their economies, she argues:

“Britain imposes a ‘super tax’ on remittances sent to African countries, causing a loss of £1.8bn a year from money sent home by workers. Think about it, £1.8bn is taken away from the people sending money to support their families in Nigeria.  Imagine what £1.8bn a year could do in the pockets of families depending on money sent to them from abroad? This is where blockchain technology comes in. It solves a problem like this by making it easier and cheaper to transfer and remit payments internationally.”

Nigeria has had a difficult cryptocurrency history. Early last year it was reported that the Central Bank of Nigeria was considering implementing its own cryptocurrency, but later the same year, it was advising banks to distance themselves from virtual currency, warning them, “not to use, hold or transact in any way with the technology.”

The remarks came at a time when Nigeria’s interest in cryptocurrencies was flourishing. According to data from Coindance, weekly trading volume on Localbitcoins in Nigeria surged 500 percent in 2017.  Nigeria then, was among top countries using Google to search for ‘bitcoin’, alongside South Africa, Slovenia, Holland, and Austria. Although, it was reported at this time that a Ponzi scheme may have been partly responsible for the clicking figures. The scheme reportedly cost investors UD$50 million in early March of that year.

In a press release issued in March of this year, the CBN is now reiterating its warnings of last year, suggesting that due to crypto investments being unprotected, investors will be at risk. Lady Walker maintains that it is lack of knowledge which holds back the tide of progress in the African crypto space, which in turn creates institutional and public skepticism such as the CBN’s.

“People are skeptical because that is human nature. We are natural cynics and skeptics and rarely trust what we don’t understand. This is why I urge people to truly understand the nature of the industry, asset and also yourself”

Lady Walker believes that there will come a time when all Nigerian banks will have to adopt cryptocurrencies of their own, but due to the current volatility of the crypto market, it remains a future goal of those who see cryptocurrency as the financial future. She maintains:

“Bitcoin is a reality. We have all major world governments scrambling to make sense of it and world leaders sharing their views on the currency. For the past 700 years, our world has relied on the European legacy banking system for means of payments and transactions. Bitcoin is definitely challenging the traditional way when it comes to transfer of value. Just like the internet changed how we shop, bank, date and find information.”

About 40% of Nigeria’s population is unbanked, which blocks nearly half of the population from the financial economy. To this, the fintech CEO argues “All you require is a smartphone and internet to start sending and receiving payments. No I.D required, filling out paperwork, etc… Do you know how much this could change things for the people of Nigeria?”

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Vietnam Tightens Crypto Laws After ICO Scams 32,000 Investors

Vietnamese authorities are investigating two allegedly fraudulent initial coin offerings (ICOs) which may have affected as many as 32,000 investors, losing up to USD 660 million.

The ICOs, Ifan and Pincoin, according to Vietnam’s Tuoi Tre News, are reported to bear some of the hallmarks of Ponzi schemes, alerting authorities and sparking an official investigation in the Southeast Asian country.

Investors protesting against the ICOs on the weekend gathered outside Modern Tech’s Ho Chi Minh City headquarters demanding refunds. Modern Tech, which claimed to be the authorized agent for both Ifan and Pincoin, was based in Ho Chi Minh City’s Vietnamreal building which had been cleaned out by its owner a month prior to the events.

The ICOs were launched through conferences in Hanoi and remote areas of the country in order to lure in customers. Investigators grew suspicious when commissions began to be paid in digital coins rather than fiat currency. Investors were then unable to withdraw their cash despite observing their investments accrue value.

Singapore-created Ifan described itself as “the most advanced social network [for] celebrities and artists enabling a better connection with fans”. Pincoin, initiated in Dubai, simply described itself as an “investment opportunity” promising up to 40% in monthly profits.

The police chief of Ho Chi Minh City commented that “all cryptocurrencies and transactions in cryptocurrencies are illegal in Vietnam… we haven’t officially launched an investigation until we receive accusations from any of the alleged victims”.

Reuters claims to have seen a copy of Prime Minister Nguyễn Xuân Phúc’s directive instructing the State Bank of Vietnam to cease allowing financial services that relate to cryptocurrency. The directive included measures to counter money laundering and counter terrorist activity through cryptocurrency.

Last year, Vietnam announced that it was considering a legal framework for the management of cryptocurrencies due to their increased popularity in the country. These moves have been reflected in other Asian countries in order to alleviate the risks of fraud.


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Kashmir Hill – Federal Judge Rules Bitcoin Is Real Money

Kashmir Hill – Federal Judge Rules Bitcoin Is Real Money: contributor Kashmir Hill (@KashHill) highlights a new development regarding ways existing laws can be applied to Bitcoin-related activity.  Excerpts:

“In defending himself against the SEC suit, Shavers argued that Bitcoin isn’t actually money and that the SEC shouldn’t be able to prosecute him.”

“‘Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands.’”

“‘It is clear that Bitcoin can be used as money,’ writes Judge Mazzant in a ruling on Tuesday. ‘It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses.’”

”’[Bitcoin] can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan,’ writes Mazzant. ‘Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.’”

 – (Futher discussion of this legal memorandum)

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